diff --git a/internal/hcp/api/mock_service.go b/internal/hcp/api/mock_service.go
index d8d09220f..8ab149f3b 100644
--- a/internal/hcp/api/mock_service.go
+++ b/internal/hcp/api/mock_service.go
@@ -98,7 +98,8 @@ func (svc *MockPackerClientService) PackerServiceCreateIteration(params *packerS
 	}
 	payload := &models.HashicorpCloudPackerCreateIterationResponse{
 		Iteration: &models.HashicorpCloudPackerIteration{
-			ID: "iteration-id",
+			ID:           "iteration-id",
+			TemplateType: params.Body.TemplateType,
 		},
 	}
 
@@ -131,8 +132,9 @@ func (svc *MockPackerClientService) PackerServiceGetIteration(params *packerSvc.
 
 	payload := &models.HashicorpCloudPackerGetIterationResponse{
 		Iteration: &models.HashicorpCloudPackerIteration{
-			ID:     "iteration-id",
-			Builds: make([]*models.HashicorpCloudPackerBuild, 0),
+			ID:           "iteration-id",
+			Builds:       make([]*models.HashicorpCloudPackerBuild, 0),
+			TemplateType: models.HashicorpCloudPackerIterationTemplateTypeTEMPLATETYPEUNSET.Pointer(),
 		},
 	}
 
diff --git a/internal/hcp/api/service.go b/internal/hcp/api/service.go
index e717523e8..41a20ccc2 100644
--- a/internal/hcp/api/service.go
+++ b/internal/hcp/api/service.go
@@ -80,6 +80,7 @@ func (client *Client) CreateIteration(
 	ctx context.Context,
 	bucketSlug,
 	fingerprint string,
+	templateType models.HashicorpCloudPackerIterationTemplateType,
 ) (*packer_service.PackerServiceCreateIterationOK, error) {
 
 	params := packer_service.NewPackerServiceCreateIterationParamsWithContext(ctx)
@@ -88,6 +89,7 @@ func (client *Client) CreateIteration(
 	params.BucketSlug = bucketSlug
 	params.Body = packer_service.PackerServiceCreateIterationBody{
 		Fingerprint:  fingerprint,
+		TemplateType: templateType.Pointer(),
 	}
 
 	return client.Packer.PackerServiceCreateIteration(params, nil)
diff --git a/internal/hcp/registry/hcl.go b/internal/hcp/registry/hcl.go
index 0773c2368..ccbc1f577 100644
--- a/internal/hcp/registry/hcl.go
+++ b/internal/hcp/registry/hcl.go
@@ -5,6 +5,7 @@ import (
 	"fmt"
 
 	"github.com/hashicorp/hcl/v2"
+	"github.com/hashicorp/hcp-sdk-go/clients/cloud-packer-service/stable/2021-04-30/models"
 	sdkpacker "github.com/hashicorp/packer-plugin-sdk/packer"
 	"github.com/hashicorp/packer/hcl2template"
 	"github.com/zclconf/go-cty/cty"
@@ -26,7 +27,7 @@ const (
 
 // PopulateIteration creates the metadata on HCP for a build
 func (h *HCLMetadataRegistry) PopulateIteration(ctx context.Context) error {
-	err := h.bucket.Initialize(ctx)
+	err := h.bucket.Initialize(ctx, models.HashicorpCloudPackerIterationTemplateTypeHCL2)
 	if err != nil {
 		return err
 	}
diff --git a/internal/hcp/registry/json.go b/internal/hcp/registry/json.go
index a5aced955..20e1f808e 100644
--- a/internal/hcp/registry/json.go
+++ b/internal/hcp/registry/json.go
@@ -5,6 +5,7 @@ import (
 	"path/filepath"
 
 	"github.com/hashicorp/hcl/v2"
+	"github.com/hashicorp/hcp-sdk-go/clients/cloud-packer-service/stable/2021-04-30/models"
 	sdkpacker "github.com/hashicorp/packer-plugin-sdk/packer"
 	"github.com/hashicorp/packer/packer"
 )
@@ -42,7 +43,7 @@ func (h *JSONMetadataRegistry) PopulateIteration(ctx context.Context) error {
 	if err != nil {
 		return err
 	}
-	err = h.bucket.Initialize(ctx)
+	err = h.bucket.Initialize(ctx, models.HashicorpCloudPackerIterationTemplateTypeJSON)
 	if err != nil {
 		return err
 	}
diff --git a/internal/hcp/registry/types.bucket.go b/internal/hcp/registry/types.bucket.go
index 81e412af7..59114999c 100644
--- a/internal/hcp/registry/types.bucket.go
+++ b/internal/hcp/registry/types.bucket.go
@@ -106,7 +106,7 @@ func (b *Bucket) connect() error {
 //
 // b.Initialize() must be called before any data can be published to the configured HCP Packer Registry.
 // TODO ensure initialize can only be called once
-func (b *Bucket) Initialize(ctx context.Context) error {
+func (b *Bucket) Initialize(ctx context.Context, templateType models.HashicorpCloudPackerIterationTemplateType) error {
 
 	if err := b.connect(); err != nil {
 		return err
@@ -119,7 +119,7 @@ func (b *Bucket) Initialize(ctx context.Context) error {
 		return fmt.Errorf("failed to initialize bucket %q: %w", b.Slug, err)
 	}
 
-	return b.initializeIteration(ctx)
+	return b.initializeIteration(ctx, templateType)
 }
 
 func (b *Bucket) RegisterBuildForComponent(sourceName string) {
@@ -302,10 +302,14 @@ func (b *Bucket) LoadDefaultSettingsFromEnv() {
 // createIteration creates an empty iteration for a give bucket on the HCP Packer registry.
 // The iteration can then be stored locally and used for tracking build status and images for a running
 // Packer build.
-func (b *Bucket) createIteration() (*models.HashicorpCloudPackerIteration, error) {
+func (b *Bucket) createIteration(templateType models.HashicorpCloudPackerIterationTemplateType) (*models.HashicorpCloudPackerIteration, error) {
 	ctx := context.Background()
 
-	createIterationResp, err := b.client.CreateIteration(ctx, b.Slug, b.Iteration.Fingerprint)
+	if templateType == models.HashicorpCloudPackerIterationTemplateTypeTEMPLATETYPEUNSET {
+		return nil, fmt.Errorf("packer error: template type should not be unset when creating an iteration. This is a Packer internal bug which should be reported to the development team for a fix.")
+	}
+
+	createIterationResp, err := b.client.CreateIteration(ctx, b.Slug, b.Iteration.Fingerprint, templateType)
 	if err != nil {
 		return nil, fmt.Errorf("failed to create Iteration for Bucket %s with error: %w", b.Slug, err)
 	}
@@ -318,12 +322,12 @@ func (b *Bucket) createIteration() (*models.HashicorpCloudPackerIteration, error
 	return createIterationResp.Payload.Iteration, nil
 }
 
-func (b *Bucket) initializeIteration(ctx context.Context) error {
+func (b *Bucket) initializeIteration(ctx context.Context, templateType models.HashicorpCloudPackerIterationTemplateType) error {
 	// load existing iteration using fingerprint.
 	iteration, err := b.client.GetIteration(ctx, b.Slug, api.GetIteration_byFingerprint(b.Iteration.Fingerprint))
 	if api.CheckErrorCode(err, codes.Aborted) {
 		// probably means Iteration doesn't exist need a way to check the error
-		iteration, err = b.createIteration()
+		iteration, err = b.createIteration(templateType)
 	}
 
 	if err != nil {
diff --git a/internal/hcp/registry/types.bucket_service_test.go b/internal/hcp/registry/types.bucket_service_test.go
index 154447011..603174437 100644
--- a/internal/hcp/registry/types.bucket_service_test.go
+++ b/internal/hcp/registry/types.bucket_service_test.go
@@ -27,7 +27,7 @@ func TestInitialize_NewBucketNewIteration(t *testing.T) {
 
 	b.Iteration.expectedBuilds = append(b.Iteration.expectedBuilds, "happycloud.image")
 
-	err = b.Initialize(context.TODO())
+	err = b.Initialize(context.TODO(), models.HashicorpCloudPackerIterationTemplateTypeHCL2)
 	if err != nil {
 		t.Errorf("unexpected failure: %v", err)
 	}
@@ -59,7 +59,32 @@ func TestInitialize_NewBucketNewIteration(t *testing.T) {
 	if ok := b.Iteration.HasBuild("happycloud.image"); !ok {
 		t.Errorf("expected a basic build entry to be created but it didn't")
 	}
+}
+
+func TestInitialize_UnsetTemplateTypeError(t *testing.T) {
+	t.Setenv("HCP_PACKER_BUILD_FINGERPRINT", "testunsettemplate")
+	mockService := api.NewMockPackerClientService()
+	mockService.BucketAlreadyExist = true
+
+	b := &Bucket{
+		Slug: "TestBucket",
+		client: &api.Client{
+			Packer: mockService,
+		},
+	}
+
+	b.Iteration = NewIteration()
+	err := b.Iteration.Initialize(IterationOptions{})
+	if err != nil {
+		t.Errorf("unexpected failure: %v", err)
+	}
+
+	err = b.Initialize(context.TODO(), models.HashicorpCloudPackerIterationTemplateTypeTEMPLATETYPEUNSET)
+	if err == nil {
+		t.Fatalf("unexpected success")
+	}
 
+	t.Logf("iteration creating failed as expected: %s", err)
 }
 
 func TestInitialize_ExistingBucketNewIteration(t *testing.T) {
@@ -81,7 +106,7 @@ func TestInitialize_ExistingBucketNewIteration(t *testing.T) {
 	}
 	b.Iteration.expectedBuilds = append(b.Iteration.expectedBuilds, "happycloud.image")
 
-	err = b.Initialize(context.TODO())
+	err = b.Initialize(context.TODO(), models.HashicorpCloudPackerIterationTemplateTypeHCL2)
 	if err != nil {
 		t.Errorf("unexpected failure: %v", err)
 	}
@@ -138,7 +163,7 @@ func TestInitialize_ExistingBucketExistingIteration(t *testing.T) {
 	b.Iteration.expectedBuilds = append(b.Iteration.expectedBuilds, "happycloud.image")
 	mockService.ExistingBuilds = append(mockService.ExistingBuilds, "happycloud.image")
 
-	err = b.Initialize(context.TODO())
+	err = b.Initialize(context.TODO(), models.HashicorpCloudPackerIterationTemplateTypeHCL2)
 	if err != nil {
 		t.Errorf("unexpected failure: %v", err)
 	}
@@ -210,7 +235,7 @@ func TestInitialize_ExistingBucketCompleteIteration(t *testing.T) {
 	b.Iteration.expectedBuilds = append(b.Iteration.expectedBuilds, "happycloud.image")
 	mockService.ExistingBuilds = append(mockService.ExistingBuilds, "happycloud.image")
 
-	err = b.Initialize(context.TODO())
+	err = b.Initialize(context.TODO(), models.HashicorpCloudPackerIterationTemplateTypeHCL2)
 	if err == nil {
 		t.Errorf("unexpected failure: %v", err)
 	}
@@ -253,7 +278,7 @@ func TestUpdateBuildStatus(t *testing.T) {
 	b.Iteration.expectedBuilds = append(b.Iteration.expectedBuilds, "happycloud.image")
 	mockService.ExistingBuilds = append(mockService.ExistingBuilds, "happycloud.image")
 
-	err = b.Initialize(context.TODO())
+	err = b.Initialize(context.TODO(), models.HashicorpCloudPackerIterationTemplateTypeHCL2)
 	if err != nil {
 		t.Errorf("unexpected failure: %v", err)
 	}
@@ -308,7 +333,7 @@ func TestUpdateBuildStatus_DONENoImages(t *testing.T) {
 	b.Iteration.expectedBuilds = append(b.Iteration.expectedBuilds, "happycloud.image")
 	mockService.ExistingBuilds = append(mockService.ExistingBuilds, "happycloud.image")
 
-	err = b.Initialize(context.TODO())
+	err = b.Initialize(context.TODO(), models.HashicorpCloudPackerIterationTemplateTypeHCL2)
 	if err != nil {
 		t.Errorf("unexpected failure: %v", err)
 	}